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Labor Standards Based on the outline of Professor D.P. Disini, Jr. I. Introduction Labor Law_ It is the law governing the rights and duties of ER and EE [a] with respect to the terms and conditions of employment, and [b] with respect to labor disputes arising from collective bargaining respecting such terms and conditions. 3 Branches 3 branches: 1. Labor Standards 2. Labor Relations 3. Welfare Legislation Labor Standards E. Company Policies -generally binding and valid on the parties and must be complied with until finally revised/amended unilaterally or preferably through negotiation by competent authority (unless shown to be grossly oppressive or contrary to law) China Banking Corporation v. Borromeo, 440 SCRA 622 (2004) WON Labor Case Lapanday Agricultural Development Corporation v. CA, 324 SCRA 77 (2001) [a] presence of ER-EE relationship [b] theres a violation of the Labor Code (LC). Other than these, it is not a labor case. LC is the regulatory law; there must be strict interpretation. Management Function/ Management Prerogative - It is the employers prerogative to prescribe reasonable rules and regulations necessary or proper for the conduct of its business or concern to provide certain disciplinary measures to implement said rules and to assure that the same be complied with. At the same time, it is one of the fundamental duties of the employee to yield obedience to all reasonable rules, orders, and instructions of the employer, and willful or intentional disobedience thereof, as a general rule, justifies rescission of the contract of service and the preemptory dismissal of the employee. Gustilo v. Wyeth Philippines Inc., 440 SCRA 67 (2004) -The Court has always respected a companys exercise of its prerogative to devise means to improve its operations. Thus, it has held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, supervision and transfer of employees, working methods, time, place and manner of work Philcor Employees Union v. Phil.Global Communications, 495 SCRA 214 (2006) Limitations to Management Prerogative
Labor standards provide the working conditions of employees, including entitlement to overtime pay and premium pay for working on rest days. Penaranda v Baganga Plywood Corp., 489 SCRA 94 (2006) Labor standards refers to the minimum requirements prescribed by existing laws, rules and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including occupational, safety and health standards. Batong Buhay Goldmines Inc v dela Serna, 312 SCRA 22 (1999)
Basis for Enactment of Labor Law 1. The Constitution Art.II.5(1987 Consti): The maintenance of peace and order, the protection of life, liberty, and property, and promotion of the general welfare are essential for the enjoyment by all the people of the blessings of democracy. Art. II.18 (1987 Consti): The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. 2. Police Power: The [SSS Law] implements the general welfare mandate of the Constitution and constitutes a legitimate exercise of the police power of the State. CMS Estate Inc v Social Security System, 132 SCRA 106 (1984) Sources of Law A. Labor Code, IRR B. Contract -The MOA, being a contract freely entered into by the parties, now constitutes as the law between them, and the interpretation of its contents purely involves an evaluation of the law as applied to the facts herein. Kasapian ng Malayang Manggagawa sa Coca-Cola v. CA C. CBA -The CBA is the norm of conduct between the parties and compliance therewith is mandated by the express policy of the law. DOLE Phils. v. Pawis ng Makabayang Obrero, 395 SCRA 112 (2003) D. Past Practices (company practices) Requisites to be a source of rights and obligations 1. freely, voluntarily and continuously given within a considerable length of time Davao Fruits Corp v Associated Labor Union, 225 SCRA 562 (1993) 2. not just a single instance (not granted only once) Samahang Manggagawa etc. v. NLRC, 295 SCRA 171 (1998) 3. should have been done over a long period of time and must be shown to have been consistent and deliberate (American Wire and Cable Daily Rated Employees Union v. American Wire and Cable Co, Inc., 457 SCRA 684 (2005) 4. not be by reason of a strict legal or contractual obligation, but by reason of an act of liberality on the part of the employer Pag-asa Steel Works, Inc. v. CA, 486 SCRA 475 (2006)
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Law, CBA, fair play and justice DOLE Philippines, Inc. v. Pawis, 395 SCRA 112 (2003) Even as the law is solicitous of the welfare of employees, it must also protect the rights of an employer to exercise what are clearly management prerogatives. As long as the companys exercise of those rights and prerogatives is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such exercise will be upheld. Valiao v. CA, 435 SCRA 543 (2004)
Compromise and Waiver Periquet v NLRC, 186 SCRA 724 (1990) 1. The law frowns upon waivers and compromise as a general principal because it is subject to abuse (Law recognizes that the situation is not of even or equal terms bet. ER and EE. Principle is grounded on fair play) 2. But not all C & W are void or contrary to law (Labor law not meant to oppress ERs. Just as it protects EEs, it also protects ERs. Theres a shared responsibility: EEs right to the fruits of their labor, and Ers rights to the return of their investment) 3. There is a test to determine the validity of C & W: [a] Voluntarily entered into [b] Proximate equality, no moral ascendancy over the other [c] Amount is reasonable and not unconscionable II. Labor and Constitution Labor Sector -characterized as the primary social economic force [ArtIi.18, 1987 Constitution)
any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer.
any person compulsorily covered by the GSIS under Commonwealth Act Numbered One hundred eighty-six, as amended, including the members of the Armed Forces of the Philippines, and any person employed as casual, emergency, temporary, substitute or contractual, or any person compulsorily covered by the SSS under Republic Act Numbered Eleven hundred sixty-one, as amended. any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment.
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boundary system: The fact that the driver does not receive fixed wages but only the excess of the boundary given to the owner/operator is not sufficient to change the relationship between them. Indubitably, the driver performs activities which are usually necessary or desirable in the usual business or trade of the owner/operator. The existence of an employment relation is not dependent on how the worker is paid but on the presence or absence of control over the means and method of the work. Villamaria v. CA, 487 SCRA 571 (2006) Commissions: payment of compensation by way of commission does not militate against the conclusion EER exists. Under Art.97 of LC, wage shall mean however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, price or commission basis. Insular Life Assurance Co v. NLRC 1998
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Hours of Work -it doesnt follow that a person who doesnt observe normal hours of work cannot be defined as an employee. Lazaro vs. SSS, 435 SCRA 472 (2004)
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X: -employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee (Project employee) -service to be performed is seasonal in nature and the employment is for the duration of the season (seasonal employees) Special Rules Project employees *A280: (1) For a specific project or undertaking; (2) completion/termination determined at time of engagement *immaterial if the employment lasts longer than 1 year: length of service is not controlling for project employees. Even if service renewed, if every time renewed, they had a contract for a specific term or duration Palomares v. NLRC, 277 SCRA 439 (1997) *if dismissal unjustified + before expiration of the term, the project EE should be paid his salary for the unexpired portion of his contract. AM Oreta & Co v. NLRC, 176 SCRA 218 (1989) *the project and principal business must be separate and distinct from each other ALU-TUCP v. NLRC, 234 SCRA 678 (1994) Casual Empolyees TEST: not the employment contract, but the nature of the job (if usually necessary or desirable to the main business of the ER, EE regular employee AM Oreta & Co v. NLRC, 176 SCRA 218 (1989) *If more than 1 year in service: status of regular employment attaches to the casual worker on the day immediately after the end of his 1st year of service Kimberly v. Drilon, 185 SCRA 190 (1990) *On janitorial and messengerial services: may be considered directly related to the business, BUT they are deemed necessary San Miguel Corp v. Abella, 461 SCRA 392 (2005) Fixed term employment Brent v. Zamora Doctrine 1. Fixed term employment is valid. Nothing in the law prohibits fixed term employment, provided, that it does not intend to circumvent the law on tenurial security 2. 2 requisites for validity: (a) entered knowingly and voluntarily by the parties without any force, duress or improper pressure (b) ER and EE dealt with each other on more or less equal terms, no moral dominance over the other *Seafarers: contractual employees, whose employment is governed by the POEA standard employment contract Millares v. NLRC, 385 SCRA 307 (2002)
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shall not exceed 6 months from date the employee started working (unless apprenticeship for a longer period). 6 month period = 180 days Mitsubishi v. Chrysler Labor Union, 433 SCRA 206 (2004) services may be terminated for just cause
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when EE fails to qualify as a regular EE in accordance with reasonable standards made known by ER to EE at the time of his engagement *termination may be done even before the end of the probationary period, International Catholic Migration Commission v. NLRC, 169 SCRA 508 (1989)
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ER has obligation to inform the EE of the reasonable standards to qualify as regular EE Mitsubishi v. Chrysler Labor Union, supra. if allowed to work after the probationary period, shall be considered a regular EE Holiday Inn Manila v. NLRC, 226 SCRA 417 (1993)
Exceptions to the 6-month rule: *Buiser v. Leogardo (salesrep case), 131 SCRA 151 (1984): 6month rule may be extended provided: 1. parties agree so 2. longer period necessary to learn the nature of the work to be performed * probi EE may become a regular EE even before the 6 months had lapsed. International Catholic Migration Commission v. NLRC, supra * Mariwasa v. Leogardo, 169 SCRA 465 (1989): 6-month period may be extended, provided: 1. absence of any indication that the extension is a mere stategem of the ER to avoid the legal consequences of a probi period satisfactorily completed 2. written consent of the EE 3. EE wanted the extension to improve his performance and to qualify for regular employment *Absorbed employees (merger of companies, EEs of the absorbed company absorbed into the newer company) -cannot be considered probi: they were already well-trained in their respective functions Cebu Stevedoring v. Regional Director, 168 SCRA 315 (1988) -no double probation: if probi before then became a regular EE, then absorbed to another company, cannot be subjected to another probi employment. A Prime Security Services v. NLRC, 322 SCRA 283 (2000) *Private School Teachers
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w/ compulsory related theoretical instructions/ apprenticeship program (approved by DOLE before apprenticeship agreement entered into. Nitto Enterprises v. NLRC, 248 SCRA 654 (1995) involves a contract between an apprentice and an ER highly skilled trade or skill
Qualifications Sec12 employment of children below 15yo 1. when child works directly under sole responsibility of parents/legal guardian -only members of employers family employed -provided: a. no danger b. provide with education 2. public and entertainment/info (cinema, theater, radio, tv) -DOLE permit -concluded by parents -express agreement by child -prevent child exploitation, discrimination -continuing program for training and skills acquisition Terms and Conditions A61 1. max. 6 months 2. min 75% below min. wage 3. apprenticeship program approved by DOLE A72 (OJT): without compensation Costs: A71 -ER may deduct costs of training expenses from taxable income provided: a. apprenticeship program recognized by DOLE b. deduction shall not exceed 10% of direct labor wage c. pay apprentice min. wage (not 75% of the min wage) B. Learners 1. trainees in a. semi-skilled b. other industrial occupation (non-apprenticeable) 2. Learnership program APPROVED by authority 3. can only be hired when (A76(b)): a. no experienced worker available b. employment necessary to prevent curtailment of employment opportunities c. employment doesnt create UNFAIR COMPETITION in terms of labor costs/impair/lower working standards 4. the contract should include (A75): a. names and addresses b. duration (maximum of 3 months) c. wages: minimum 75% of applicable min. wage d. commitment of ER to hire learners as regulars 5. would be deemed as regulars if: worked first 2 months, terminated before end of stipulated period, no fault on learner C. Handicapped Workers - If qualified, handicapped workers may be considered apprentices or for apprenticeship -should be given the same terms and conditions of a qualified able-bodied person. Should be paid full compensation, like a regular EE, Bernardo v, NLRC, 310 SCRA 186 (1999)
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not under the effective control and supervision of the ER Merdicar Fishing Corp. v. NLRC, 297 SCRA 440 (98) number of hours spent working cannot be reasonably ascertained Union of Filipro Employees v. Vivar, 205 SCRA 200 (1992)
Normal Hours of Work (A83): 8 hours max Health personnel GR: 8 hrs, 5 days/wk (40 hrs) X: 8hrs, 6 days/wk (48 hrs) entitled to min 30% of regular wage on 6th day Compressed Work Week: Requisites (a) the employee voluntarily agrees to it (b) there is no diminution in their weekly or monthly take home pay or fringe benefits (c) The benefits are more than or at least commensurate or equal to what is due the employees without the compressed work week. (d) overtime pay will be due and demandable when they are required to work on those days which should have ceased to be working days because of the compressed work week schedule. (e) no strenuous physical exertion or that they are given adequate rest periods (f) it must be for a temporary duration as determined by the department of labor Hours worked (to be compensable) (A84): includes a. EE required to be on duty b. EE suffered or permitted to work Travel time, when beneficial to ER Rada v. NLRC, 205 SCRA 69 (1992) i. travel from home to work: if on call and required to travel ii. all in the days work: traveling is the principal activity, regardless of contract, custom, practice iii. travel away from home: cuts across EEs workday *Not counted when: (Luzon Stevedoring v. Luzon Marine Department Union, 101 Phil. 257 (1957)) i. EE ceases to work; ii. EE may rest completely;
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EE died: pay wages to heirs ER authorized in writing by EE to pay wages to a family member 4. payment to another person authorized by law + in writing Non-interference (A112) -ER cannot interfere with freedom of EE to dispose wages -EE cannot be compelled to purchase from ER Wage Deduction (A113) GR: ER cannot make deductions from EEs wages X: -insurance premium -union check-off -when ER authorized by law or SOLE regulations -with written authorization from EEs, ER not pecuniary benefit Unlawful deductions/ Withholding/ Deposits 1. Deposits for Loss or Damage (A114) GR: no deposit for reimbursement of loss of or damage to tools, materials, or equipment supplied by the employer X: -ER engaged in trades, occupation or businesses with recognized practice of making deductions or requiring deposits -deductions/deposits necessary or desirable as determined by SOLE *if deposit for actual amount paid by EE, EE should have been heard + his responsibility clearly shown (A115) 2. Witholding Wages and Kickbacks (A116): unless with the EEs consent
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4. regardless if accepted or not -ER has duty to prevent it, provide procedures for settlement -ER liable if failed to act/no immediate action done even if informed of the act
XI. Minors (RA 7610) *children: below 18/ above 18 but cant fully take care of themselves *Child abuse: -maltreatment -habitual/not *working children: if BELOW 15: Cant be employed unless: -works directly under sole responsibility of parents, only ERs family employed -works in publicentertainment/onfo *Work permit should be first secured from DOLE *Nonformal education program should be provided *Cant employ child models for: -alcoholic beverages -intoxicating drinks -tobacco and by-products -violence XII. Househelpers *Coverage (A141): -service in ERs home (if works in corporations resthouse and recreational facilites for use of top executives and clients of the corporation, not domestic employees Apex Mining Co. Inc vs. NLRC, 196 SCRA 251 (1991) -usually necessary/desirable for MAINTENANCE/ENJOYMENT thereof -includes MINISTERING TO THE PERSONAL COMFORT AND CONVENIENCE of members of ERs household -includes services of family drivers *Period of Contract: 2 years, renewable *Minimum Wage (A143), minimum cash wage = basic cash wage + lodging, food and medical attendance (A144) *non-household work (commercial/industrial/agricultural): should be paid higher salary rate than agricultural/nonagricultural workers (A145) *Opportunity for education (A145): -below 18 years -opportunity for at least elementary education -cost of education: part of compensation, unless contrary stipulation *Treatment of Househelpers: -just and humane manner, no physical violence (A147) -furnish with free suitable and sanitary living quarters + adequate food + medical attendance (A148) *domestic househelpers EXPRESSLY EXCLUDED from coverage of OT, holiday pay, premium pay, SIL (A82) XIII. Homeworkers ER (155): 1. delivers/cause to be delivered any goods to be processed/fabricated, returned to be disposed/distributed 2. sell goods, articles, have same processed/fabricated/rebuys Industrial Homeworker: work for an ER/contractor is carried out by a Homeworker at his/her home -materials may/may not be furnished XIV. Termination of Employment Coverage (A278): -all establishment -for profit or not *for contract employees: security of tenure only to a limited extent: during period of time their respective contract of employment remained in effect :Labajo v. Alejandro, 165 SCRA 747 (1988)
*Probationary employees: enjoys security of tenure (Skillworld Management and Marketing Corporation v. NLRC 186 SCRA 465 (1990): -during the probationary period -before the contract expires A. Termination of Employment by the EE Causes: a. just cause (285b): -without serving notice: 1. serious insult by employer of honor and person of employee 2. inhuman and unbearable treatment 3. commission of a crime/offense 4. analogous causes b. w/o just cause (288a) -serve written notice at least 1month in advance, or else ER may hold EE liable for damages Resignation -voluntary act of an employee who finds himself in a situation where he believes that PERSONAL REASONS cannot be sacrificed in favor of the exigency of the service + no other choice but to disassociate himself from employment Habana v. NLRC, 298 SCRA 537 (1998) -requisites: 1. unconditional 2. with intent to relinquish a portion of term or of office 3. act of relinquishment *4. voluntary (for voluntary resignation) *Floating Status: should last only for a legally prescribed period of time. When that status of an EE exceeds 6m, he may be considered to have been illegally dismissed from the service. Valdez v. NLRC, 286 SCRA 87 (1998) When no termination of employment(A286): -bonafide suspension of business or undertaking for a period not exceeding 6 months -fulfillment by the EE of a military or civic duty B. Termination of Employment by ER Requirements: 1. Based on the grounds in A282,283 or 284
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I. Substantial Due Process Requirements: based on grounds in LC A283 Just causes: a. SERIOUS MISCONDUCT/WILLFUL DISOBEDIENCE of the lawful orders of ER in connection with work b. GROSS AND HABITUAL NEGLECT c. FRAUD/WILLFUL BREACH of trust reposed in EE d. COMMISSION OF A CRIME/OFFENSE by EE against e. Analogous causes a. SERIOUS MISCONDUCT requisites (Premiere Devt Bank v. Mantal, 485 SCRA 234 (2006)) i. serious ii. must relate to the performance of EEs duty iii. EE must be unfit to continue work WILLFUL DISOBEDIENCE i. assailed conduct WILLFUL/INTENTIONAL, willfulness characterized by wrongful or perverse attitude ii. order violated: reasonable, lawful, made known to employee, must pertain to duties which the EE has been engaged to discharge b. GROSS AND HABITUAL NEGLIGENCE
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alleged losses, loss or expected, should be proven by SUFFICIENT and CONVINCING EVIDENCE: 1. audited financial statements, financial condition 2. specify cost-reduction measure actually undertaken in GF 3. audited by independent external auditors
*Temporary Retrenchment = floating status -apply by analogy A286: could only last up to 6 months -after 6 months, ER should either: i. recall the EEs to work ii. permanently retrench, following the requirements of law *Redundancy v. Retrenchment (AG&P United Rank and File Assn v. NLRC, 265 SCRA 159 (1996) Redundancy: services of an employee are in excess of what is required by an enterprise Retrenchment: resorted to primarily to avoid or minimize business losses *Closure v. Retrenchment (Alabang Country Club v. NLRC, 466 SCRA 329 (2005) Closure: reversal of fortune of ER, complete cessation of business operations, actual locking-up to prevent further financial drain Retrenchment: reduction of personnel usually due to poor financial returns; downsizing d. CLOSURE OF BUSINESS Cattista v. NLRC, 247 SCRA 46 (1995) -employer may close or cease his business operations or undertaking even if he is ot suffering from serious business losses or financial reverses AS LONG AS he pays termination pay -management prerogative -as long as in GF to advance its interest and not for the purpose of defeating or circumventing the rights of the EEs -PARTIAL CLOSURE: allowed to minimize expenses and reduce capitalization A284 Disease -EE found suffering from any disease -EEs continued employment is prohibited by law/prejudicial to his health as well as to the health of his co-employees A286 Temporary Cessation of Operations (San Pedro Hospital of Digos v. SOLE, 263 SCRA 98 (1996) -valid exercise of management prerogative provided that it is NOT CARRIED OUT in order to circumvent the provisions of the LC or to defeat the rights of EEs under the LC -determination: management prerogative. Not required that a business continue operating at a loss simply to maintain the workers in employment, which is tantamount to taking of property without due process -should not be motivated by BF *SPECIAL CASE: Business Transfers -Transferee company not required to recognize the validity of contracts between EE and former ER (employment contracts, CBA). Sundowner Development v. Drilon, 180 SCRA 14 (1989) II. Procedural Due Process A277b.
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*Essence of Due Process: ample opportunity to be heard and to defend himself *Right to counsel -constitutional right -contemplates right to counsel in Administrative and Quasijudicial bodies NOT during investigation of ER Salaw v. NLRC, 202 SCRA 7 (1991) *Notice requirements To EE: cannot be substituted, give some time to prepare for eventual loss of job To DOLE: enable proper authorities to determine after hearing WON the termination was done in GF + opportunity to ascertain and verify alleged cause of termination *2-notice rule 1st notice: apprises EE of particular acts or omissions for which dismissal is sought 2nd notice: informs ERs decision to dismiss EE *Hearing -a formal/trial type of hearing is not at all times and in all instances essential to due process, requirements of which is satisfied where the parties are accorded fair and reasonable opportunity to explain side of controversy National SemiConductor Distribution Ltd v. NLRC, 291 SCRA 348 (1998) -Labor Arbiter cannot be required to hold a formal hearing. He can ask for position papers in lieu of hearings (New Rules of Procedure of NLRC, Sec. 5 Rule V) -no hearing necessary if the EE already admitted responsibility for act he was accused of Maagos v. NLRC, 300 SCRA 484 (1998) -due process not violated where a person is given the opportunity to be heard BUT chooses not to give his side of the case Caurdenetan Piece Workers Union v. Laguesma, 285 SCRA 291 (1998) *Failure of Due Process Wenphil: valid cause for dismissal due process = valid dismissal but pay damages Serrano: valid cause for dismissal due process = valid dismissal but pay FULL BACKWAGES Agabon: just cause due process = ineffectual dismissal Other procedural matters: *burden of proof: on the employer *weight of evidence: substantial evidence *prescription period: based on an injury so 4 years from the time of dismissal *offer to reinstate: liability for illegal termination not abated. Wrong has been committed, harm has been done. Ranara v. NLRC, 212 SCRA 631 (1992) Santions and Remedies
Damages MD/ED: proper where EE had been harassed and arbitrarily terminated by ER; dismissal attended by BF, constituted an act oppressive to labor -claims for damages must have reasonable causal connection with any of the claims provided for in A217(a) in order to be cognizable by the Labor arbiter -ND: granted in sound discretion of the court and relevant circumstances; given when violation of petitioners right to statutory due process by ER warrants payment of indemnity XV. Retirement A287 *Any employee MAY BE RETIRED upon reaching the RETIREMENT AGE ESTABLIHSED in the -CBA -other applicable employment contract *In case of retirement, the EE shall be entitled to receive such RETIREMENT BENEFITS as he may have earned under: -existing laws -any CBA -other agreementsw Which shall not be less than what is provided *In the ABSENCE of a retirement plan or agreement providing for RETIREMENT BENEFITS: upon reaching 60-65 (compulsory retirement age) years + served at least 5yers in said establishment *If Underground mining EE: 50-60 compulsory retirement age + at least served 5 years *RETIREMENT PAY: at least month salary pay for every year in service (1year=6m)